Bogleheads.org

Yes 20% is too high. First why do you hold REITS which are just less then 2% of the market by market cap? The answer per Fama/French is that they don't correlate with other asset classes. That means they tend to go up when other classes don't do well, and go down when other classes do well. Followin...

Since you did not mention "her inactive 403" are you intending to roll that into an IRA? That is what I would have done yesterday. The higher costs there are going to add up to a lot of lost appreciation over 30 or so years. The other thing I notice is your proposed new allocation seems to...

Why waste your time with someone who does not want to listen? He has a hodgepodge of stuff that he read some article about and decided to buy. I.E. no coherent plan. He has next to no bonds and 32% of his money is in cash not even beating inflation and waiting for him to get excited about something ...

What I see and don't like is your tax placement. You have each account as a similar portfolio. In fact it's all you money and should be one portfolio with funds placed based on tax efficiency. In other words the three accounts don't need to look the same. In order of tax efficiency worst to best; ta...

I take it your thinking of the cash value pension is a sort of bond. I tend to agree. As a result you can have a lower bond percent in other accounts. I don't know the figure because I don't know how big the cash value pension is. There is nothing wrong with the total bond index available to you. I ...

You can roll the old IRA and 401 into a new IRA. Vanguard or other low cost fund family is fine. Now the expense in 10 years is fine if you allow for it in the taxable account. I would have a slightly higher bond allocation and call that my reserve for that expense. Most rebalance once or twice a ye...

In the taxable the expense ratio's are horrendous. That extra 1% a year adds up to a lot of lost appreciation over 20 years. Also international emerging markets are very tax efficient, so some VXUS (Vanguard international emerging total market) or the Fidelity equivalent is in order for this account...

If you want to complain to the people who enforce the do not call law, go to www.FTC.gov and in their consumer protection section you can fill out a complaint online. They do periodically chase the bad guys out of business. Dave

There was a wonderful quote in an article over at Bloomberg.com William Buffet was saying, that over a long period of time he has at some point criticized holding about every asset class. But when he has criticized holding gold, it's the only time people get belligerent, threatening, etc. Interestin...

You get rewarded if you go to a lower cost fund. That extra 1% a year adds up to a lot of lost appreciation over 30 years. Note in the HSA and 401 the two low cost funds are the 500 index, and the Dodge & Cox fund is reasonable. You don't need to have an identical portfolio in each account. It's...

I believe the answer depends on the state. I know of one state where the answer is flat out no. If you want to go after an entity not named, you file another lawsuit. I know of another where you get an expedited proceeding in the original case where you show alter ego, fraudulent conveyances etc. an...

Ok I am another one of those [darn --admin LadyGeek] lawyers. Every time you add a corporate layer you inconvenience the plaintiffs lawyer who is trying to collect on a claim. So the fact you have a corporate form in the way gives you some protection. Adequate insurance is the only real protection. ...

It kinda shows that even the biggest advocates of indexing market time a little when valuations get to extreme levels. What he is advocating is that treasuries are so overpriced that you should mostly be in corporates. I happen to agree with him, but he is backing off the traditional total market Bo...

Back in the 1960's Some really wealthy people paid no taxes on some really big incomes. Ms. Phelps Dodge was one, she had a million dollar income, 0% paid in tax. So Congress enacted the Alternative Minimum Tax which basically limited deductions, exclusions. You calculate your tax both ways if your ...

A simple portfolio for someone your age would be 30% Vanguard Total Stock Market, 20% total International. The rest in fixed income. I would just leave half in a ladder of CD's given the pathetic rates on bonds, and fact you seem to be used to CD's. Dave

I try to dodge tax questions and hope the accountants respond. You can learn the answers to your questions if you go over to www.IRS.gov and run IRA and retirement savings through their search engine. Dave

I think the basic plan is fine. Cost differences between Vanguard Admiral funds and ETF's are not significant. I don't understand why you go to TD Ameritrade instead of Vanguard if your going to hold Vanguard products. What is significant is is your getting away from those really expensive USAA fund...

I'll shoot my mouth off again. The conventional wisdom is to hold intermediate term bond funds. That's based on the yield curve. As you go out longer, you don't get paid a lot for the additional risk your taking. Interest rate movements are very difficult to call. Right now rates across the spectrum...

I think your split is a good choice. Both funds are low cost. The additional costs of the other funds add up to a lot of lost appreciation over 30 years. When you get more money you can add it to an IRA and hold some other asset classes in that. I did not see a low cost bond fund, but I know Fidelit...

I can explain duration. Suppose you have a bond with a 3% coupon and over time interest rates go up. In other words people won't buy a bond that yields 3%, they want one that yields 5%. So the bond sells for a discount and if your holding it you cant sell it for face value. Duration is a rule of thu...

You get a reminder about holding bonds on days like today where the stock market goes down by 200+ points and bonds went up. So you want to have some. Note I want to point out that in my earlier post where I pointed out that you could hold foreign bonds does not mean to go overboard. They may do bet...

I realize that measuring things is not an exact science. Price to earnings, price to book value, duration may not be an exact science, but they remain important. Even if you don't know exactly how much your bond fund will go down if interest rates go up you should be able to grasp the basic point. A...

The trick is to keep your average duration fairly short. There are still reasons to have bonds such as stabilizing your portfolio. Take a look at Vanguards Short Term Investment grade fund. With a duration of about 2.8 your not taking a lot of interest rate risk. Further the world economy does not m...

Yes a 529 is good anytime you can achieve tax free compounding do it. I don't see any IRA on your list. I don't have a problem with your desired allocation either. Dave

I got into Emerging Markets and China quite early about 2002. It had big returns and I paid a lot of gains taxes when I reduced my allocation in 2006 and 2007 due to their becoming more popular. Maybe because of that I picked up some FM. The only other frontier etf I looked at was really just a Sout...

Like others have said. You have different accounts, but they don't have to be the same. You only have one portfolio and it's all your money. Generally tax efficient assets in taxable, tax inefficient in tax free. In order of tax efficiency worst to best. Taxable bonds, REIT, Small Value, Large Value...

What does he know? If you dump your bonds, how will you know when to get back in? Dave

When your talking about small cap stocks having more seems to be better than having less. The reasoning sometimes is explained that you increase the odds of holding one that get's hit out of the park. Also there are a lot more small cap stocks than large cap stocks. Note that the S and P has 600 sto...

VSS is fairly tax efficient due to the foreign tax credit so I think your fine with it in taxable. Dave

Morningstar publishes a tax cost ratio. I don't follow it that much but here it is for VTI, VB and VBR that is Vanguard Total Stock Market, Small Blend, and Small Value for the couple of years that they calculated it. VTI .45, .35, .37, .31 VB .64, .44, .50 VBR .89, .67, .60 So you see it's slightly...

I would put the LCB in taxable.
If you go over to morningstar and run the tax cost ratio for VB Vanguard Small Blend, and VTI Vanguard Total Stock Market you get:

VB .64 .44 .50
VTI .45 .35 .37 .31

Not much of a difference though, but see

Potential Gains VB 14.47 VTI 21.50 Dave

Both these funds are actively managed. That is to say the managers have the power to shorten the duration of their bonds as long as they stay within the range of the prospectus. I think the intermediate fund is 5-7 years, and the long term 6 to 12 years. So both managers have the shortest durations ...

The only thing I see is that the taxable and tax free are identical portfolios. This can waste some tax efficiency. In order of tax efficiency worst to best; taxable bonds, REIT, Small Value, Large Value, Large Blend, International/Emerging due to the foreign tax credit. So depending on capital gain...

My guess is your wondering what to do with the taxable. Since your almost on your stock allocation I would look over Vanguards, tax exempt bond funds. Two come to mind the Vanguard High Yield Tax Free and Intermediate Term Tax Exempt. There is a difference in yield and duration with the high yield f...

Re: the 125k I would open a taxable account and Vanguard or Fidelity. If the latter you want to use their low cost Spartan funds. Since you did not list the costs of the funds in the 401 I really don't want to comment on your choices , except for this. Most don't recommend more than 5% of your asset...

I think the guy's get paid to trade. Your mom is going to incur a lot of capital gains on stocks I suspect she has held for years, just to buy an asset class that is yielding 2-3 %. It's ridiculous. Dave

Don't walk away from those high cost Oppenheimer funds - run away. That extra 1% a year adds up to a lot of lost appreciation over 30 years. Do the math. 13 years ago when I joined the old list I made the change to Vanguard for all my accounts, and I have never regretted it. Take the loss, learn the...

There is a rule of thumb that you should never insure for a claim you can afford to pay yourself. That just raises your rates. Also excessive claims can lead to your policy getting canceled which will cause you to pay more for insurance. That mostly applies to deciding how high a deductible to have ...

Yup. It took me years to learn this. And the major factor was reading your first book that said small growth stocks were the lowest performing asset class because such stocks are always bid up to unreasonable levels by investors seeking to find the next Microsoft. (or Apple). Only a few of such stoc...

I agree with the gist of the article. If you look at two bond funds and one yields 3% and the other 6% there is a reason for the difference. The difference is risk. I don't buy the theory that inflation and precipitously high rates of interest are around the corner. You just don't get high inflation...

No to the 15% small cap and 15% REIT. I did not mean to confuse you. REITS generally fit into the small value category on the Morningstar box of stock market components. Or put another way most REITS are also small value stocks. In terms of market capitalization REITS are about 2% of the total stock...

You are about what I suggest people to be duration wise. If you go much shorter yields get close to non existent, if rates rise you wont get killed compared to folks with long term bonds - 15-20 year duration. Dave

I don't completely agree with the advice you just got. I often post the order of tax efficiency of asset classes worst to best. It is Taxable bonds, REIT, Small Value, Large Value, Large Blend, International/Emerging due to the foreign tax credit. Ideally you have just Total Stock and/or Total Inter...

I don't know the economics for covering car's but most motorcyclists going to Central or South America use www.motorcycleexpress.com for coverage. Dave

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The reason for the suggestion to stick with the fidelity small was costs. Also tax placement because VBR is not super tax efficient. My opinion is that when you own separate European and Pacific stock indexes you trade more rebalancing than you would if you just had total international. Hence not ta...

I wonder if this is Petrocelli posting in drag, and he is just laughing himself crazy. Dave
P.S I gave up on my watch a year ago and just look at my cell phone to see what time it is.

I would substitute Total US Stock Market and Total International for the 500 and three international funds in taxable and call it done. Mostly I would do this for tax effiency and simplicity. Dave

The problem with I-bonds is you lose several months interest if you sell em before 5 years. Tale a look at Vanguard Short Term Investment Grade, and compare with a CD at your local Credit Union. Dave

You don't want to use a tax free account for something like saving for a house down payment because you pay a penalty if you withdraw from it. The conventional wisdom is to use a bond fund which has a duration about the same as the period your saving for. I would use Short Term Investment Grade. but...